The Drumheller Mail

Local Internet providers concerned about usage based billing

    Area Internet providers are concerned about a Canadian Radio and Telecommunications Commission (CRTC) decision that would allow large distributors to change their billing practices for the residential Internet services provided to small Internet service providers that are wholesale customer.     The decision, which was to take effect on March 1, 2011, would mean the residential customers of smaller ISPs would be subject to additional charges for going over specific bandwidth caps.
    Smaller ISPs that rent bandwidth from larger providers would no longer be able to offer unlimited Internet data usage, and in the end, consumers may have to pay based on data usage, very much how Internet is billed on a smart phone.
    Since then, the CRTC has launched a review of the decision and has set a deadline for comments from the public to April 29.
    Industry minister Tony Clement also lashed out against the decision, and indicated if the CRTC does not reverse its decision, the government would.
    If the decision stands, it could have an effect on providers such as Reality Bytes. It provides wireless services, and buys bandwidth in bulk from either Bell or Telus Big Pipe.
    “We are buying in bulk and right now it is unlimited,” said owner John Shoff. “If it goes through, nobody really knows what is going to happen. If it goes to usage based billing we will have to turn around and charge that out to our customers. If it changes and we are paying per megabyte, then we are going to have to turn around and charge per megabyte.”
    “You don’t pay for radio per minute and you don’t pay for TV per minute, so why would you pay for Internet per megabyte?”
    He also adds that the largest growing trend in the Internet is cloud technology, where computer users essentially store data remotely through the Internet. If usage based billing is implemented, Shoff said it would “kill” cloud computing in Canada.
    Reality Bytes provides Internet to remote areas through its wireless services that are not currently served by the larger providers. If implemented it may make it more expensive for rural users to access the Internet.
    Shoff says while he provides unlimited Internet, not many of his customers are big users. However he says the limits they are looking at implementing are low.
    “If you wanted to go watch a little bit of TV, say a couple shows and maybe a movie on Netflix, and you did this five times a week, you would be way over your limit,” he said.
    Gerry Matte owns Magtech, which also provides Internet services and uses bandwidth from larger providers. He said the charges would force small providers to purchase expensive equipment.
    “The ISPs who provide unlimited usage will have to install new usage monitoring software which is a cost of $3,000 to $5,000, per 1,000 users per year, excluding the additional hardware,” he said. “Then there will also be the extra cost of labour to compile the usage data and bill the users. Even allocating the work to current staff would still be at least $15,000 in salary. This alone would be an increase of $3 to $5 for every user excluding any over-usage charges.”
    Matte believes the issue is now in the realm of politics.
    “The federal minister stated that the CRTC ruling will not pass as long as there is a Conservative government, and ordered a 60 day review of the ruling,” he said. “The federal budget is presented March 22, 2011.  If it is defeated, the CRTC ruling will become an election issue for the Conservative party. As it affects the majority of voters it may actually get them a majority government.”
    “If the budget is not defeated, there is no election, and by the time the review is completed (June 2011) most people will have forgotten all about it until it is passed and they see the increase on their bill.”
    He says the big winners in this will be Bell, Telus and Shaw, no matter which way the decision goes.
    “If the bill does not pass, I think the big three will increase the network access charge to their distribution centers for the small ISPs, which would still force the smaller ISPs to pass the increase to the users. This would still accomplish their main goal which is to make the services appear more competitive per megabyte used,” he said.
    Shoff directs those who are concerned to an organization called Open Media (www.openmedia.ca).
    “They are lobbying the government against usage based billing, I have already signed up and encouraged as many people as I can,” said Shoff.

   

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